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Chapter 1 Introduction to the Field

Chapter 1 Introduction to the Field. Operations Management Why Study Operations Management? Transformation Processes Defined Operations as a Service The Importance of Operations Management Historical Development of OM Current Issues in OM. OBJECTIVES.

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Chapter 1 Introduction to the Field

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  1. Chapter 1Introduction to the Field

  2. Operations Management • Why Study Operations Management? • Transformation Processes Defined • Operations as a Service • The Importance of Operations Management • Historical Development of OM • Current Issues in OM OBJECTIVES

  3. What is Operations Management?Defined Operations management (OM) is defined as the design, operation, and improvement of the systemsthat create and deliver the firm’s primary products and services

  4. Why Study Operations Management? Systematic Approach to Org. Processes Operations Business Education Career Opportunities Management Cross-Functional Applications

  5. What is a Transformation Process?Defined A transformation process is defined as a use of resources to transform inputs into some desired outputs

  6. Transformations • Physical--manufacturing • Locational--transportation • Exchange--retailing • Storage--warehousing • Physiological--health care • Informational--telecommunications

  7. What is a Service and What is a Good? • “If you drop it on your foot, it won’t hurt you.” (Good or service?) • “Services never include goods and goods never include services.” (True or false?)

  8. OM in the Organization Chart Finance Marketing Operations Plant Manager Operations Manager Director Manufacturing, Production control, Quality assurance, Engineering, Purchasing, Maintenance, etc

  9. Core servicesare basic things that customers want from products they purchase Core Services Defined

  10. Quality Flexibility Speed Price (or cost Reduction) Core Services Performance Objectives Operations Management

  11. Value-added servicesdifferentiate the organization from competitors and build relationships that bind customers to the firm in a positive way Value-Added ServicesDefined

  12. Value-Added Service Categories Problem Solving Operations Sales Support Information Management Field Support

  13. The Importance of Operations Management • Synergies must exist with other functional areas of the organization • Operations account for 60-80% of the direct expenses that burden a firm’s profit.

  14. Historical Development of OM • JIT and TQC • Manufacturing Strategy Paradigm • Service Quality and Productivity • Total Quality Management and Quality Certification

  15. Historical Development of OM (cont’d) • Business Process Reengineering • Supply Chain Management • Electronic Commerce

  16. Current Issues in OM • Coordinate the relationships between mutually supportive but separate organizations. • Optimizing global supplier, production, and distribution networks. • Increased co-production of goods and services

  17. Current Issues in OM (cont’d) • Managing the customer’s experience during the service encounter • Raising the awareness of operations as a significant competitive weapon

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